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I found where Magento is saving the file, it actually re-saving it with a higher compression/image quality than was used in PS, thus the file is getting bigger. I can fix it but it would mean overriding a Magento core file.

This is the file responsible for increasing the image quality:
app/code/core/Mage/Catalog/Model/Product/Image.php

At the beginning of the file the quality level is hardcoded to 90 and then applied in getImageProcessor(). By commenting out $this->_processor->quality($this->_quality); temporarily I can see that the issue goes away.

Why would Magento do this? This seems like it should be a common issue too. Is the best solution just to create a class override for this core Magento file?